Former agricultural and rural development head in the Free State, Peter Thabethe, agrees with his former political principal, Mosebenzi Zwane, that the Vrede Dairy Project could have been a resounding success.

“If it was given the opportunity to be implemented it would have been one of the greatest projects,” said Thabethe.

Instead, the failed enterprise was the source of woe — and, indeed, palpable fear — for scores Vrede residents, including two intended beneficiaries who testified that government officials promised them benefits they never enjoyed.

The Asset Forfeiture Unit (AFU) described the venture as a “scheme designed to defraud and steal monies” from the Free State Department of Agriculture and Rural Development, which Thabethe headed. An estimated R220-million from the project was allegedly paid to the Guptas and their cronies.

The numbers don’t add up

Thabethe holds bad press and subsequent investigations, including one by National Treasury, responsible for the dairy project’s failure to launch. He claimed it was denied the opportunity to succeed, but evidence leader advocate Leah Gcabashe SC hinted that the dates and numbers did not add up in support of his position.

“We will look at the numbers and the allocations and use those to determine what could have been done,” said Gcabashe, forecasting her return to the subject during Friday’s hearing.

The former Head of Department of Agriculture and Rural Development in the Free State, resumed his evidence at the Commission of Inquiry Into Allegations of State Capture, Corruption and Fraud on Thursday, 3 October 2019.

Thabethe’s previous appearance on Monday, 16 September 2019 was cut short as he and his former legal team, including attorney Hermann Fourie, had parted ways. Thabethe asked the State Capture Commission for legal assistance and his evidence was deferred. This week, he arrived with new counsel.

Zwane, former Member of the Executive Council (MEC) of Agriculture and Rural Development in the Free State, was Thabethe’s political head when the dubious dairy project was rolled out. According to Thabethe, the Vrede Dairy Project was a mega-project among several others under the “Mohuma Mobung” banner.

Zwane weighs in on Vrede

Since Thabethe’s previous evidence, Zwane has furnished the State Capture Commission with his version, and Gcabashe anticipates Zwane will testify.

“His view is that the Mohuma Mobung project was a great idea and a flagship project that would have put the Free State on the map had it been executed properly,” said Gcabashe.

Thabethe agreed with Zwane on the project’s promise; he said it would have prospered “if it had been given the opportunity to be properly executed”, but “when we started implementing the project there were so many articles in the media” and later it ground to a halt.

Thabethe referred to an initial negative press article on the Vrede Dairy Project, which he said appeared around the same time as news of a private jet carrying over 200 Gupta wedding guests landing at the Waterkloof Air Force Base in April 2013.

Thabethe said that until the time of the Waterkloof landing and the negative article on Vrede, the project had been progressing well.

“After the landing, we were then beginning to enter the second year and that is when the problems started,” he said.

The #GuptaLeaks revealed that R30-million from the dairy scheme was laundered to foot some of the Guptas’ Sun City wedding bills

“That was the time when the first article about Vrede dairy came to be,” said Thabethe.

“That triggered a lot of problems,” he continued. National Treasury referred to the article in a report investigating the project’s finances and interrogating whether it met national and provincial requirements for funding. Spoiler alert: it did not.

Some of the earliest reporting on the project appeared in Volksblad, including an article published in May 2013 reporting the company Linkway Trading, of which Ashok Narayan was a director, provided consulting services on the enterprise.

A man with many hats

Narayan was hired as a special adviser to then Free State Premier Ace Magashule, beginning on 1 March 2012. In late February 2012, Narayan accompanied Thabethe on a fact-finding trip to India about the diary project. During the trip, they visited the New Delhi office of Indian dairy producer Paras.

As Pieter-Louis Myburgh wrote for Daily Maverick, Magashule described Narayan as being “from the IT sector” and fulfilled numerous roles in relation to controversial Free State government contracts linking back to the Guptas.

Narayan was an actor in a controversial laptop deal between the Free State government and Sunbay Trading. Sunbay Trading sourced laptops from Sahara Computers, then a Gupta-owned company. Gcabashe expressed a special interest in Narayan’s “dual role” in the Vrede Dairy Project.

Narayan accompanied Thabethe on the India trip and acted as a special adviser to Magashule in 2012.

“It is important to understand which hat Mr Narayan was wearing as he did different things for the Free State government,” said Gcabashe.

Zwane’s submissions indicate he considered Mohuma Mobung as his “brainchild” and he favoured Narayan accompanying Thabethe to India. “In fact, he says he recommended Narayan,” said Gcabashe.

Elsewhere, Zwane distanced himself from the implementation and execution of the dairy project, once it had been passed by the Free State Executive Council.

Land of milk and money

Regarding the identification of land in Vrede, Zwane’s hometown, the former MEC’s version is that he was not directly involved. Gcabashe said to Thabethe of Zwane:

“He says he wasn’t directly involved and you say, in fact, he is the one who told you where you could go and speak to people about land.”

Thabethe replied: “I think it’s a matter of semantics.” Zwane, explained Thabethe, advised the department to consult the Phumelela Local Municipality as Zwane was aware they had available land.

Gcabashe referred to a PowerPoint presentation Thabethe said he presented to large South African dairy producers, such as Parmalat, Dairybelle and Clover.

“A most unhelpful presentation,” she remarked. Gcabashe asserted critical information specific to the proposed dairy venture in Vrede was “hidden” while extraneous input on topics such as cow hotels and cattle feed was included.

Zondo said the content of the presentation was “quite an important point” since Thabethe used this document while seeking a local partner, which Thabethe testified was the Free State government’s preference.

Only upon the local producers’ reluctance, which Thabethe ascribed — in part — to resistance to transformation in the South African dairy sector, did they seek an international partner.

“Chair, I don’t agree, because you call a meeting and you sit and discuss,” replied Thabethe, when asked about the perceived poor quality of the PowerPoint presentation.

Gcabashe posed some 55 of 120 questions to Thabethe, in the main informed by Zwane’s statement. Once all the questions are answered, she will tackle the dairy scam’s financials.

Proceedings resume on Friday 4 October 2019 at 09:30. DM